Affiliate Marketing and Network Marketing share several similarities that can make it confusing to businesses searching for the best marketing and management software.
To clear up any confusion, I’m going to cover the things they have in common, and the key differences between these business types.
Affiliate marketing is when a company allows individuals to sell their product or service on that company’s behalf in exchange for a commission.
Most affiliates have a website or blog of their own, and post banners or links with tracking codes to the company’s sales page. The link’s code (generated by affiliate tracking software) then records that visit and credits and sale from that user to the affiliate. Commissions are paid to the affiliate based on the total amount of sales credited to that affiliate during the payment period.
Many big brands like Amazon use affiliate marketing to sell their products all over the world.
Affiliate Marketing Terms:
Merchant: The businesses that owns the products.
Affiliate: The individual promoting the product(s).
Consumer: The individuals who see the product promotions and click on the ads or links shared by the Affiliate to purchase the product from the Merchant.
Network: You might hear this word sometimes. A network is another third party that acts as a medium between the Merchants and the Affiliates.
For example, Amazon is a Merchant, but through their seller marketplace, they can also be the Network. You can promote Amazon’s products, or you can promote products available from sellers on their marketplace.
What are the benefits of Affiliate Marketing?
Affiliate marketing leverages the power of influencers and personal branding.
Brands that sell through affiliates who are trusted by their audience will automatically tap into that trust. People don’t trust brands, they trust other people. If affiliates are recommending your products on their blogs, on social media pages, or on their websites, you will get more traffic and be more likely to make a sale.
Affiliate marketing requires a smaller upfront investment.
Boosting a promotion on Facebook, paying for ad space in a magazine, or attending events all cost money up front with no promise of a return.
By using affiliates, you are gaining trusted salespeople that you only pay when your product sells or they send traffic to your website. No risk involved for either party makes it a win-win relationship.
Affiliate marketing increases your reach exponentially.
Affiliates are a key way to tap into niche audiences. Instead of slowly building up a subscriber list or a following on social media, you can launch your product(s) to a pre-built audience that your affiliates have built and they will spend the time nurturing.
The benefits of affiliate marketing for business are obvious:
Affiliates get a passive income from their audience. Businesses get access to a larger audience that will trust their brand with very little upfront investment.
A win for everyone.
What is Affiliate Marketing Software?
Many businesses that want to really leverage the power of affiliates use affiliate tracking and marketing software.
This software can automatically onboard affiliates, provide training and marketing tools, generate tracking links, track clicks and commissions, and automatically payout commissions to affiliates.
For companies that plan to use affiliates as a main marketing tool, affiliate tracking software offers huge benefits. It saves time, makes the process automated, and helps attract more affiliates to the program while giving them the necessary tools to succeed.
Learn more about TitanAFFILIATE, our complete Affiliate Marketing and Tracking Software solution on our products page
What is Network Marketing?
Like Affiliate Marketing, Network Marketing recruits individuals to represent the brand and sell products or services on behalf of the company.
The difference here is often that network marketing recruits, also called distributors or independent business operators, are more closely tied to the network marketing (also called multi level marketing) company they have joined.
Recruits generally sign up under a sponsor, and that sponsor helps their recruits, called downline, to succeed. Sponsors make money from their personal sales, as well as a percentage from the sales in their downline.
Network marketing offers more ways for members to profit, but commissions can also become much more complicated. For Network Marketers to earn money, often times they need to spend time recruiting people to their downline as well as selling products.
Affiliate marketers often build a personal brand and can sell as many products or services from different companies as they wish. Network marketing distributors typically act as an agent of the company they have joined, and use the branding and marketing tools provided by the company. They sell the products from that company, and recruit new members that become part of their personal “business”.
Network Marketing Terms
Multi-Level Marketing (MLM):
Multi-level marketing (MLM) is a business opportunity that enables people to make money outside of a conventional job. Multi-level marketing, also called network marketing, is a strategy by which a company markets their products through a network of independent distributors.
One that markets or sells the products or services of a multi-level marketing company. Distributors, often called Independent Distributors, are independent business owners operating in partnership with their chosen mlm company.
To enroll or seek to enroll as a member. People who have enrolled are also sometimes called recruits.
Refers to the members distributors have recruited or who have joined the organization after their enrollment and whose sales or referrals also generate income for that distributor.
The details of how the commission of distributors in a multi-level marketing company will be determined on their personal sales revenue and that of their downline. Also abbreviated as a ‘Comp Plan’, this document also specifies incentives for recruiting, bonus structure, and necessary qualifications for generating income with the company.
This refers to an individual who has personally recruited or signed up a prospect to join an MLM business he is a part of. The newly recruited member becomes part of the sponsor’s team and form part of the downline.
What are the benefits of Network Marketing?
Businesses thinking of starting a network marketing business have several advantages:
Network Marketing makes recruitment easier.
Because each member of the business earns commissions from their downline, or recruits, this is a huge incentive for them to keep growing the number of members in the network marketing business. Recruiting, therefore, is done by members and isn’t the sole responsibility of the business.
Network marketing increases sales.
Many network marketing businesses set minimum purchase amounts for their members to remain eligible for commissions. Therefore, each member regularly purchases the products they are selling, which increases their motivation to sell.
Network Marketing keeps distributors motivated.
Members benefit from the sales of other members in their downline. This makes Sponsors motivated to help and train the members in their “team”. While most successful MLM companies provide marketing tools like replicated websites, videos, brochures, and access to training, sponsors give personal attention and encouragement to their team, helping to increase sales and grow the business.
Network marketing can offer the right kind of business huge advantages and help them grow quickly.
What is Network Marketing Software?
MLM software helps network marketing businesses grow and manage their business. Every aspect of an MLM business can be managed through the network marketing software, from attracting new members, communication with current members, training, product sales and fulfillment, customer support, genealogy management, commissioning payouts, and more.
Crucial features in MLM software include genealogy management, commissioning system, and marketing features like replicated websites.
TitanMLM is our flagship MLM Software, and includes a long list of features that you can view here, as well as coming with custom development hours for the necessary programming and set up of the commissioning system.
Get a complete list of Network Marketing / MLM Software features at TitanMLM.com
Key differences between Network Marketing Software and Affiliate Marketing Software
While both Affiliate Marketing Software and Network Marketing Software include marketing automation and automatic commission payment, network marketing software is designed to handle the intricacies of compensation plans, which are different than affiliate commissions.
Affiliates get a straight commission rate from the links they share. Some companies have different commission rates based on affiliate performance (ie Super Affiliates, etc.) but the rates are relatively straightforward.
Our commissioning software for affiliate marketing companies is set up to easily adjust the commission rates with very little extra work from our development team.
Network marketing compensation plans, however, are generally based on sales volume that includes sales from the downline of a member, and payouts are dependent upon where in the “line” each member is placed. Most network marketing companies like to include special bonuses or unique features in their compensation plans, which we custom program for them. A management module allows companies to then make changes to their commissioning software.
Affiliate marketers can be automatically onboarded in TitanAffiliate, and access their personal control panel to grab links, personalized landing pages, and a contact manager (CRM).
In the same way, new members in our TitanMLM are automatically onboarded and have access to their personal control panel and replicated website. Network marketing software also includes genealogy and automated (or manual, if that feature is selected) placement of new members. Members can then view their genealogy tree in a module that is specific to the MLM software.
If you’re looking for software to grow and manage your business, we offer a free initial consultation. We’ll let you know what is the best fit for your business.
Have more questions about network marketing or affiliate marketing? Drop them in the comments below or contact us now.